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Impaired assets to peak by FY20: India Ratings Impaired assets are expected to peak in FY'20 to 12.7% of advances, according to ratings firm India Ratings. Cash flow problem with respect to some good borrowers also add to the risk. Moreover, public sector banks will have to raise an addition Rs 2 lakh crore if credit picks up, it said. Impaired assets may peak at 12.7% by FY19-FY20, while credit costs will recover gradually. It is expected to come down to 178bps by FY'19 from 253bps in FY'17. This will be due to aging of a large stock of non-performing assets (NPAs) added over the last four quarters estimated at Rs 4.2 lakh crore in FY'17, said India Ratings in a report The profit oss account for most public sector banks would also be under pressure on account of the accelerated provisioning requirement on those accounts identified by the regulator for reference to the National Company Law Tribunal under the Insolvency and Bankruptcy Code in FY18 The India Ratings analysis…

RBI suggests tax sops, self-regulation to build fintech space From suggesting tax rebates to merchants for adopting digital payments to light-touch regulations to help fintech innovations bloom and even suggestions around formation of a self-regulatory body of fintech companies, the Reserve Bank of India has come up with recommendations to strengthen the fintech space. In a report on fintech and digital banking, an inter-regulatory working group under the chairmanship of RBI executive director Sudarshan Sen, came up with suggestions for the government and regulators to help the fintech sector grow and contribute to improve financial services.For the fintech sector, RBI has identified technology startups working in the space of peer-to-peer lending, blockchain, big data, smart contracts, robo advisors and online aggregators. Highlighting how this sector has attracted huge interest from VCs and global investors the report states that investment in the fintech space grew to Rs 20 billion in…

Govt to look at EC´s view on simultaneous polls The Election Commission has advised the Centre that simultaneous elections will mean even if a government fails a no confidence motion, the subsequent elections should elect the House for only the remainder of the five year term.This would apply for state assemblies too. In its written views to the Union law ministry, the Commission has advised that if “there is a situation where the dissolution of the Lok Sabha cannot be avoided”, the five year term cannot be shortened.There will be two alternatives in that case. If the remainder of the Lok Sabha´s term is “not long, there could be a provision for the President to run the administration of the country on the aid and advise of the Council of Ministers”.If the remainder of the term is long, “elections may be conducted and the term of the House should be for the rest of what would have been the original term”. The views of the Election Commission are expected to be discussed by the Union Cabin…

Govt knows how to bite the bullet: FM Jaitley defends ´tax on the wealthiest´ Finance Minister Arun Jaitley on Thursday strongly defended the imposition of the long term capital gains (LTCG) tax on listed stocks, saying the Budget proposal was to tax the wealthiest sections of society,He also said that the Budget, in these challenging times, provided Rs 120 billion relief to the middle class, including pensioners and senior citizens. Wondering at the analysis over the tax spooking the market, he said the market movement was due to global cues.“Was the tax also responsible for a fall in Dow Jones?” he asked.The FM´s reply to a general debate on the Budget saw heated exchanges in the Lok Sabha between the treasury benches and the Opposition, particularly the Congress, over the Rafale deal. While Jaitley said the breakup of the deal could not be provided due to security reasons, Congress members said they never demanded segment wise details of the deal. In his speech in the Lok Sabha, Jaitley…

No RBI decision on implementing IndAS yet: deputy governor N.S. Vishwanathan RBI deputy governor says the bank has not yet taken a decision on implementing the new accounting standards, IndAS, hinting at a possibility of missing the 1 April deadline Reserve Bank of India (RBI) deputy governor N.S. Vishwanathan on Wednesday said the central bank has not yet taken a decision on implementing the new accounting standards, IndAS, hinting at a possibility of missing the 1 April deadline. Speaking to analysts and researchers during a conference call post the monetary policy, the deputy governor added that the system should be prepared for implementation given that the document was issued two years ago. With less than two months to go and final regulations not yet announced, bankers believe that meeting the April deadline is a challenge. “Preparedness should be there as document was issued two years ago. RBI will decide on implementing IndAS later,” said Vishwanathan, according to an analyst who …